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March 4 (Bloomberg) -- Australia, the world's biggest shipper of coal, iron ore and wool, forecast commodity exports to gain to a record for a fifth straight year driven by demand in China.

Sales may reach A$189.1 billion ($178 billion) in the year ending June 30, 2009, the Canberra-based Australian Bureau of Agricultural and Resource Economics said today in a statement. That compares with a revised A$145.6 billion this fiscal year.

Prices for the nation's top five commodity exports, iron ore, coking and thermal coals, gold and crude oil have risen to records this year, stoking earnings at producers including BHP Billiton Ltd. Surging prices drove inflation in China and Japan to the fastest pace in about a decade, and the forecaster today said there are risks of more increases in emerging markets.

``The underlying demand from the economic growth of countries like China, India, Vietnam is probably going to continue for another two decades,'' Saul Eslake, chief economist at Australia and New Zealand Banking Group Ltd., told reporters at the bureau's Outlook 2008 conference in Canberra. ``Part of the rise in global inflation we've seen over the past year is directly attributable to rising prices for energy and, more recently, for food.''

China's economy expanded 11.4 percent in 2007, the fastest in 13 years, and consumer prices gained 4.8 percent, exceeding the government's 3 percent target. China's demand is driving Australia's 17th year of economic growth as companies spend a record A$57.9 billion developing mines and oil fields.

Inflation Risk

``Continued strong economic growth, industrialization and urbanization in China are putting pressure on domestic resources,'' the forecaster said in its March quarter report.

The commodity export forecast comes as the Reserve Bank of Australia today raised its benchmark interest rate to the highest in almost 12 years to slow the fastest inflation since 1991. Raw materials account for about 17 percent of Australia's economy.

``The very real concern that our central bank shares with the central banks of countries like China and Vietnam is that rising prices for food and energy could become more widespread and lead to inflationary wage demands,'' ANZ's Eslake said.

Bumper Crop

Wheat production in Australia may almost double to 26 million metric tons in fiscal 2009, the bureau said, as the nation recovers from its worst drought in history. This would be only second to the record 26.1 million tons crop of 2003-2004. Farm exports will rise 18 percent to A$31.4 billion, it said.

Contract prices for iron ore in the year starting April 1 rose by as much as 71 percent. Prices for hard-coking coal may surge to a record $200 a ton from $98 a ton this contract year, a Bloomberg survey last month showed. Spot prices for thermal coal and coking coal climbed to records this year after flooding at mines in Australia and snowstorms in China.

``China is far and away the biggest underlying force'' driving sales, Peter Arden, an analyst at Ord Minnett Ltd., an affiliate of JPMorgan Chase & Co., said by phone from Melbourne. ``The outlook is very, very rosy.''

China's biggest commodity companies, including Aluminum Corp. of China Ltd. have said they're concerned BHP's proposed takeover of rival Rio Tinto Group would concentrate supplies and wield too much pricing power. BHP and Rio are the world's largest and third- largest mining companies.

Exports of minerals and energy are forecast to jump 33 percent to A$153.4 billion in fiscal 2009, the bureau said. Earnings from energy commodities may gain 54 percent to A$66.8 billion on increased volumes and higher prices for coal and oil.

The bureau expects the price of West Texas Intermediate crude oil to average $86 a barrel in 2008, 20 percent higher than a year earlier. Gold prices, which rose to a record yesterday, may average $870 an ounce in 2008, 25 percent higher than 2007.

To contact the reporter on this story: Madelene Pearson in Melbourne on [email protected]